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Prime Minister Ehud Olmert will convene his security cabinet Wednesday to discuss Israel?s response to the continuing Qassam rocket attacks. Discussion will also address developments within the Palestinian Authority.

Ministers will hear about military response options to the Qassams: artillery bombardment, aerial bombardment and targeted assassinations. Olmert seeks to counter calls for an escalation by showing the military and diplomatic implications of an invasion of Gaza by ground forces.

U.S. Senate to block aid to Hamas govt.

The United States Senate passed a bill Friday blocking all direct financial aid by the government to the Hamas-led government in the Palestinian Authority.

The bill, which was approved unanimously, does not prohibit all humanitarian aid to the Palestinians but does impose strict limitations on such transfers.

The U.S. House of Representatives approved its own version of the bill over a month ago with a vote of 361 to 37.

?The bill fortifies the diplomatic siege-wall that the U.S. has erected around the Hamas government,? a senior Washington analyst said yesterday.

The bill stipulates that the aid boycott against the PA will only be lifted after the U.S. president notifies Congress that the PA has agreed to the conditions set by the international community, stopped all incitement against Israel and has proved that no government ministry or other official body is controlled by a terror organization.

The Senate bill provides for two exceptions to the ban against direct financial aid: The first is for monies to help organize and hold elections in the PA; the second is for monies to maintain the offices of PA Chairman Mahmous Abbas and his bodyguard detail.

The Senate bill includes a new clause requiring the secretary of state to establish a fund for peace, reconciliation and the promotion of democracy, and to cooperate with Israeli and Palestinian organizations to promote human rights, freedom of the press and coexistence.